Summing Up The Week

The market rally continued over the past week with the S&P 500 making new all-time highs seemingly every day. Despite mixed economic and geopolitical datapoints which could have sent stocks higher, the combination of positive seasonality and the expectation of the year-end “Santa Claus Rally” pushed stocks higher.

Let’s take a look at the news that moved the markets this week…

Market News

U.S. Manufacturing PMI improved more than expected

While Monday’s U.S. Manufacturing PMI came in at 49.7, more than the expected 48.8, (as reported by MSN) it’s important to remember that a figure less than 50 indicates that manufacturing remains in a contraction. While positive, the manufacturing sector still hasn’t shifted to growth mode, yet.

“The mood among U.S. manufacturers brightened in November, though any feel-good factor has yet to feed through to higher output on the factory floor,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.

South Korea declares Martial Law

On Tuesday, South Korean President Yoon Suk Yeol invoked emergency powers and declared martial law, reported CNBC. As result, the stocks of Korean companies traded on U.S. exchanges were positively smacked. While not necessarily a market-moving event for American stocks, I felt this was a good example of a Black Swan Event which all investors should keep in mind during investment planning.

Yoon Suk Yeol accused opposition parties of sympathizing with North Korea and controlling parliament. Yoon did not specify how martial law — a temporary rule by military authorities in a time of emergency — would affect governance and democracy in the country.

The Korea Exchange announced it would hold an emergency meeting “to prepare response measures” and later decide whether the market would open on Wednesday, according to local media reports.

Later on Wednesday, Yoon Suk Yeol pulled back and canceled his invocation after South Korea’s parliament voted to not back his extreme play.

Services PMI slips more than expected in November

On Wednesday, the ISM Services PMI missed expectations for November coming in at 52.1 versus 55.5 expected, reported Seeking Alpha. However, just like Manufacturing PMI, any figure above 50 signifies growth which means the services sector is in growth mode, not contraction like manufacturing.

“The decrease in the Services PMI in November was driven by decreases in each of the four directly impacting subindexes (Business Activity, New Orders, Employment and Supplier Deliveries),” said Steve Miller, chair of the ISM Services Business Survey. “However, 14 industries reported business activity growth, and 13 indicated new orders expansion; both figures are improvements compared to October.”

Payrolls increased 227K, more than expected

On Friday, the Nonfarm Payrolls Report showed an increase of 227,000 jobs in November which exceeded the estimate of 214,000, however unemployment edged higher to 4.2% as expected, reported CNBC. This somewhat mixed report left markets unsure which way to go during Friday morning trading: an increase in jobs is a positive sign for a strong economy but an increase in unemployment has the opposite effect.

The unemployment rate rose as the labor force participation rate edged lower and the labor force itself declined. A broader measure that includes discouraged workers and those holding part-time jobs for economic reasons edged higher to 7.8%.

Next Week’s Gameplan

Next week brings plenty of economic datapoints with Wholesale Inventories for October on Monday followed by Q3 U.S. Productivity and the NFIB optimism index on Tuesday. The key data comes with the release of November’s Consumer Price Index (CPI) on Wednesday and Producer Price Index (PPI) on Thursday, both of which will provide valuable insights into the current state of inflation.

Any of the data could become a market-moving catalyst, however, seasonally speaking, stocks typically remain bullish into the end of the year so any pullbacks will likely be brief. That being said, I’ve always got my buying plans at the ready in hopes we see better buying opportunities headed forward.

In the meantime, I’ll meet you back here next week, friends!

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Crytpo Corner

Bitcoin Price Action

Bitcoin broke $100K! What’s next?

Bitcoin finally broke through the $100,000 mark on Wednesday evening and didn’t stop! In fact, Bitcoin made a new all-time high of $104,000.00 (on Coinbase) before finally settling back down. Prior to making its record high, Bitcoin also set a higher weekly-low, retreating to $93,571.30.

However, Bitcoin rolled over pretty violently later in the day on Thursday, crashing down in what I call a “Scam Wick” (a bear trap executed by bears intended to clear out stop-loss orders). Bitcoin broke through the new weekly low before finding support at $92,055.86 which will now serve as the new weekly low headed into next week. In addition to this new support, we can also eye the other support levels should Bitcoin continue to pull back: $90,682.58; $87,101.00; and $85,010.00.

There’s always the possibility for a more significant pullback, too. As I’ve said in recent updates, Bitcoin has pulled back as much as -40% and still maintained a Bull Market in past cycles.

Here are the updated price targets for the key pullback targets I discussed previously based on the new all-time high. For more information, check out my “Bitcoin could CRASH to $60K” video:

• -26.31% = $76,382.44
• -30.27% = $72,277.75
• -31.24% = $71,272.31
• -39.53% = $62,679.42
• -40.24% = $61,943.48

However, I never wait for a significant pullback to start adding to my trades. I’ll add before we see a -10% drawdown from the ATH and then increase my quantities if Bitcoin pulls back even further.

The Bullish Case

Bulls are fully validated! If there was any question at all if Bitcoin was in a new Bull Market Cycle (and there shouldn’t have been), those doubts have been dashed as Bitcoin continues to make record high after record high.

The Bearish Case

Naturally, the Bears are out in full-force with arguments ranging from lowering liquidity to macroeconomic concerns as reasons for Bitcoin to crash, however the Bulls have sliced through those concerns week-after-week. This isn’t to say that Bitcoin couldn’t see a significant pullback or crash, but it’s hard to take the Bears seriously when they’ve been so wrong for so long.

Bitcoin Trade Update

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Not Your Keys, Not Your Crypto…

In light of brokerage failures in 2022, I no longer keep any of my crypto on an exchange and I only keep enough USD on the exchanges I use to execute my next few buys. I use multiple cold wallets from the brands Ledger and Trezor to hold my crypto (click the links to access the direct sites, and I receive no affiliate benefits from these links).

Additionally, I have now divided my allocated USD between two different exchanges – Gemini and Coinbase – in case one (or both) becomes insolvent. Disclaimer: We both receive a bonus if you use my Gemini referral link to open an account.

I do not trust anyone in the space, even with Coinbase (COIN) being publicly traded (and one of my own Investments in Play positions).

No price target is unrealistic in the cryptocurrency space – Bullish or Bearish.

While traditional stock market investors and traders may think the price targets in the cryptocurrency space are outlandish due to the incredible spread (possible moves include drops of -90% or more and gains of +1000% or more), Bitcoin has demonstrated that, more than any speculative asset, its price is capable of doing anything.

Here are some of Bitcoin’s price movements over the past couple of years:

• In 2017, Bitcoin rose +2,707% from its January low of $734.64 to make an all-time high of $19,891.99 in December.
• Then, Bitcoin crashed nearly -85% from its high to a December 2018 low of $3128.89.
• In the first half of 2019, Bitcoin rallied +343% to $13,868.44.
• In December, Bitcoin crashed -54% to a low of $6430.00 in December 2019.
• In February 2020, Bitcoin rallied +64% to $10,522.51.
• In March , Bitcoin crashed nearly -63% to a low of $3858.00, mostly in 24 hours.
• Then, Bitcoin rallied +988% to a new all-time high of $41,986.37 in January 2021.
• Later in January 2021, Bitcoin dropped -32% to a low of $28,732.00.
• In February, Bitcoin rallied +103% to a new all-time high of $58,367.00.
• Later in February, Bitcoin dropped -26% to a low of $43,016.00.
• In April , Bitcoin rallied +51% to a new all-time high of $64,896.75.
• In June , Bitcoin crashed -56% to a low of $28,800.00.
• In November, Bitcoin rallied +140% to a new all-time high of $69,000.00.
• In November 2022, Bitcoin crashed -78% to a low of $15,460.00.
• In April 2023, Bitcoin rallied +101% to a high of $31,050.00.
• In June, Bitcoin dropped -20% to a low of $24,750.00
• In July, Bitcoin rallied +29% to a high of $31,862.21.
• In September, Bitcoin dropped -22% to a low of $24,900.00.
• In January 2024, Bitcoin rallied +97% to a high of $49,102.29.
• Later in January, Bitcoin dropped -22% to a low of $38,501.00.
• In March, Bitcoin rallied +92% to a new all-time high of $73,835.57.
• In August, Bitcoin dropped -33% to a low of $49,050.01.
• In December, Bitcoin rallied +112% to a new all-time high of $104,000.00.

Where will Bitcoin go from here? Truly, anything is possible…

What if Bitcoin’s headed to zero?

DISCLAIMER: Anyone considering speculating in the crypto sector should only do so with funds they are prepared to lose completely. All interested individuals should consult a professional financial adviser to see if speculation is right for them. No Get Irked contributor is a financial professional of any kind.